Great question, and you’re definitely not alone in feeling unsure when you hear advice like this, especially in a market like Ottawa’s, where prices have been fluctuating. 

In short, most homes in Ottawa as of this blog post are selling between 97-100% of asking price if they are appropriately priced, but there are always exceptions and there is no “one size fits all” for the market.

Here’s my take on the situation and some key points to consider:

1. The Market Dictates the Price

In a seller’s market like the one we’ve had in Ottawa over the past few years, it’s quite common for homes to sell over the asking price. Sellers often price homes slightly below what they expect to get, with the hope of generating a bidding war. Your realtor might be recommending this strategy based on similar recent sales in the area.

However, the important question is whether this specific property is likely to attract multiple offers. If so, offering over asking might be necessary to stay competitive. It’s also important to review the market comparables (also called “comps”) that show what similar homes in the area have sold for recently.

2. Understanding the “List Price”

The list price is essentially the seller’s starting point—it doesn’t always reflect the true market value of the home. Ottawa homes, especially in desirable areas, might be listed low to drive interest and create multiple bids. For example, if a home is listed at $499K but similar homes in the area are selling for $520K-$530K, a bid at $520K could still be considered reasonable.

3. The Right Strategy for You

The decision to bid over asking should also depend on your personal situation:

• How long do you plan to stay in the home? If it’s a long-term investment, offering over asking might make more sense, as the value of the home will likely appreciate over time.
• How much competition is there? If you’re in a competitive neighbourhood with limited inventory, a higher bid might be necessary.
• Your budget and comfort level. It’s essential not to stretch yourself too thin. Even though your realtor might recommend bidding higher, make sure you’re comfortable with the financial commitment and the potential mortgage costs.

4. Work with Your Realtor

A good realtor will give you advice based on the data but also listen to your concerns. Feel free to ask for a detailed explanation of their reasoning—why they believe bidding $20-$30K over asking is appropriate in this case. They should be able to show you the comparable sales and help you understand the current dynamics of the neighbourhood and type of property you’re interested in.